Surviving The Recession
Photo credit: Reverend Andy
Surviving the recession is a challenge, financially as well as emotionally.
Your investments are losing value. Your job doesn’t feel so secure anymore. Watching the news every night is downright depressing. How do you deal with the recession? What should you do?
The best advice I – or anyone – can give you for surviving the recession:
DON’T PANIC.
Just like you, I check my financial statements these days and I don’t like what I see. It ain’t pretty. But I refuse to panic. I’m a long-term investor. The stock portion of my portfolio is spread over several mutual funds, a few ETFs and a few individual stocks. Each and every one of these holdings was carefully chosen, after thorough research. I believe in these stocks and funds. I consider them as my best bet in growing my money – LONG TERM.
But markets are volatile. Bear markets are part of the investing game. And even though they happen quite frequently, the good news is that LONG TERM, the stock market returns an average of 10% annually (that’s the S&P 500’s historical average). And if you’re a long-term investor, and hold on to your assets for longer than a year, any tax you’ll eventually pay when selling these assets is long-term capital gain tax.
To me, the only way to calmly accept a bear market is to pretty much ignore my portfolio. In a bull market, I check my portfolio every day. It’s fun and thrilling. In a bear market, I check it once a week, if that. It’s kind of like checking your blog stats too often: not a good idea.
In other words, I agree with J.D. Roth, who says that it pays to ignore financial news, and adds “The daily fluctuations of the stock market are meaningless to me”. I also agree with Valerie Morrison, who said in her post Is Your Subscriber Count Showing?, “[it's] like my financial investments. I don’t want to see my portfolio every day.”
Just like Moolanomy, “I am holding steady and continuing to invest for the long-term. I can do this because I have the right asset allocation and investment mix for my investment time horizon and risk tolerance.” (Read more in his interesting post “Should I Get Out Of The Stock Market?“)
No doubt, the current economic meltdown is a major one. We still don’t know where it is going to lead us or how it will end. The comparisons to 1929 are scary.
Given the complexity and the magnitude of the current financial crisis, I do believe it’s important to make sure you have FDIC insurance for any funds that are not invested in the stock market. Any other type of insurance is useless right now. Another alternative is to buy treasuries. Of course, none of this will protect you if our financial system collapses or if uncontrollable inflation erupts, but assuming you’re not going to buy gold bullion and hide it under your mattress, this is probably the best you can do to protect your money right now.
Whether you’re invested in the stock market or not, a global recession – or depression – is going to affect you. I would love to hear your thoughts. How are you surviving the recession?
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Related Reading:
Recession: How To Protect Yourself
Recession Fears? Don’t Let The Whingers Get You Down
Savers Losing Out In The Current Economy
Not Plugging My Ears Or Covering My Eyes
The Financial Crises Will Be Harmless, Until It Kills Us
I am not a financial adviser. The information provided here on surviving the recession is general in nature. Prior to taking any action, please consult a financial adviser regarding your specific situation.
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Barbara Swafford responds:
Posted: October 6th, 2008 at 1:22 am →
Hi Vered – I’m still trying to wrap my head around the current “buy out/bail out”, and who is actually going to benefit. I’m not one to panic, but do believe it’s necessary to be informed.
Barbara Swafford’s last blog post..A.S.K. Andy Bailey – What Was The Inspiration Behind The CommentLuv Plugin
Scott McIntyre responds:
Posted: October 6th, 2008 at 2:00 am →
I haven’t ever invested in shares, Vered, so in that respect I do not have to keep updated on information.
However, the issue of ‘bailouts’ is as hot here in the UK as in the US, with European banks proposing a package of measures to safeguard investments.
It looks as if the UK’s Prime Minister is going to announce that the government will guarantee that personal savings up to UK£50,000 / US$100,000 will be protected should a bank go bust.
This is a huge incentive to keep money in banks- and a relief from worry for many.
Hopefully, this will go some way to avoid panic withdrawals which cut off much needed lifeblood to financial institutions.
Personally, I check a financial/ savings/ best buy website regularly which ensures I keep my savings in the most appropriate place. I also get brilliant ideas on ways to save money too.
Just now, I am more mindful of making larger purchases and intend waiting until events have calmed down a little before deciding on where to spend.
Dave Fowler responds:
Posted: October 6th, 2008 at 2:33 am →
Hi Vered, I’d like to pretend that I understand how the financial markets work, but I don’t. I want to find out though. I’m not very proud of the way I’ve handled my finances over the years. I’m doing something about it now.
Dave Fowler’s last blog post..Flaps. Check. Undercarriage. Check.
Avital responds:
Posted: October 6th, 2008 at 2:41 am →
I deal with it the same: just ignore it (thus I always forget the password for my bank account …) – As long as I keep my portfolio closed, then any lost or gain is strictly on the paper, which is how I prefer to look at it.
Lance responds:
Posted: October 6th, 2008 at 3:29 am →
Vered, I love the philosophy you follow – think long term. That’s the strategy I follow as well. I continue to invest in the carefully chosen mutual funds I have, and know that they are long-term investments. For short-term investments, I make sure I’m connected with an FDIC-insured bank, and I’m good. Then, I just try to ignore much of what I hear about the financial crisis. Is that the best strategy? Maybe not the best, but it is a pretty good one I think. It keeps my time commitment down, and as well, my blood pressure as well. I happen to think that now is a good time to buy, with prices being lower, too. But these are all just my opinions…
UrbanVox responds:
Posted: October 6th, 2008 at 3:44 am →
wow…
you kinda made me think now…
The fact is that I don’t… I used to invest a lot… but ever since I got married that actually stopped…
I think I now rather invest in things I can touch and see growing…
I’ve just bought some professional equipment for film making and photography and I am happy that at this precise moment that has more potential to generate income than investing in the financial market…
I might be wrong… but right now… that’s how I deal with the current global financial stability.
Ah… and yes… all the equipment is ensured.
Miranda responds:
Posted: October 6th, 2008 at 4:53 am →
Great post! I, too, do my best to avoid worrying about the market. I did have my brief moment of statement shock when my quarterly IRA statement came, but I got over it. I’m buying more for less, and I’ll be sitting pretty when I retire. A long time horizon ensures that the worst of the current crisis won’t really devastate me. Sometimes all the doom and gloom is a bit much, and it is important to remember the first rule of recession finances: Don’t panic. Instead, take a measured, long-term view.
Miranda’s last blog post..Get Out of Debt: Back to Basics
Writer Dad responds:
Posted: October 6th, 2008 at 6:00 am →
I’m with you Vered. I understand that everything is cyclical. I try to make healthy decisions in good times and in bad. Today will always lead me toward tomorrow, regardless of the weather.
Urban Panther responds:
Posted: October 6th, 2008 at 7:05 am →
I deal with the current uncertainty by ignoring it. I have always been fiscally responsible, and I am not up to my ying-yang in debt. I zero out my credit cards every month. In other words, if I can’t afford it, I don’t buy it. The only exceptions being a mortgage and car loan. They seem to be a fact of life, but again, I made sure I could more than afford them. The Lion and I both have good paying government jobs, and are unlikely to lose them anytime soon, if at all. I do not take this for granted, and while I may not be passionate about my job (the Lion is about his) I made a deliberate lifestyle choice taking this job. In general, I do not follow the media. I get up every morning and look outside. If armageddon happened overnight, I’m sure it would be obvious *smile*
Evelyn Lim responds:
Posted: October 6th, 2008 at 7:19 am →
I like the idea of investing for the medium to long term. I don’t have the time to be checking my portfolio day in/out. So a short term strategy does not sit well with me.
I also agree with not worrying excessively about the financial markets since no amount of worrying can help change their direction. No one can truly predict what is going to happen next. While it is important to keep an ear to what’s happening, getting emotional to all the bad news is the last thing I want to do!
Evelyn Lim’s last blog post..How Would You Cross The River?
MizFit responds:
Posted: October 6th, 2008 at 7:29 am →
Im ignoring as well.
not in a ‘bad’ way but in a FRETTING WONT CHANGE IT way.
if by fretting you mean OBSESSING—-which I entirely do.
MizFit’s last blog post..MizFit the Dainty Ballerina. (or not. either way.)
Bamboo Forest responds:
Posted: October 6th, 2008 at 7:39 am →
Dealing with the recession…
I’m not sure. Though, I will say this… Getting stressed over it is probably a losing proposition no matter how you look at it. Part of, quality of life, is how we feel inside. You could have all the riches in the world and yet if you felt terrible inside, it would be as if you had nothing.
In that case, recession or not; we should all try to be as happy as possible. And getting stressed over the recession, not only makes us less happy, but less productive too.
Bamboo Forest’s last blog post..7 Things That Happen in Movies – But Probably Not to You
M responds:
Posted: October 6th, 2008 at 7:49 am →
Long term definitely! If we react to what is constantly bombarding us we tend become more negative. Keeping a positive outlook helps me see better more happy things. The glass is half full vs. half empty. Nice post!
M’s last blog post..Yoga and Basil: A Common Thread
Jill responds:
Posted: October 6th, 2008 at 7:49 am →
Just like you, I ignore it. As far as I’m concerned, I won’t need this money for 20+ years. I will move it to “safer” vehicles once I’m closer to retirement.
Don Mills Diva responds:
Posted: October 6th, 2008 at 8:10 am →
Good advice Vered.
I am the same way though I feel for my parents who this year actually have to start cashing out retirement savings for income.
For us it’s actually kinda a good thing. My work sends off my retirement contributions for the last two months this week and I’m thrilled that I’m actually able to put in $1,000 at this time…
Don Mills Diva’s last blog post..Let him be
Max Forlani responds:
Posted: October 6th, 2008 at 8:26 am →
Hi Vered,
After having just bought a house and having spent plenty to prepare the arrival of our first kid, there is basically no money left to invest anyway. So I’m obviously not worried about the stock market. I do feel for those who are losing substantial amounts of their life savings because of this bank crisis.
What worries me most about a huge depression is possible job loss. And I do hope from the bottom of my heart that this one will not be the prelude of another world war, as the 1929 one was.
Cheers,
Max
Max Forlani’s last blog post..How to Name Your Baby for a Multi-Cultural Life
Suzie responds:
Posted: October 6th, 2008 at 8:31 am →
My hubby handles it by freaking out every Saturday and spiralling into a depresseion about it. Very productive.
Suzie’s last blog post..You Just Gotta Laugh
Investing in a Bear Stock Market - Money & Investing - Banks.com responds:
Posted: October 6th, 2008 at 8:56 am →
[...] option is to load up on Treasuries. And to do it now, before the Fed decides to cut interest rates. Vered, over at MomGrind, makes this observation: Another alternative is to buy treasuries. Of course, none of this will protect you if our [...]
Chris responds:
Posted: October 6th, 2008 at 9:11 am →
I ignore my Mutual Funds. I check it once in a while. As far as the recession is concern, I just try to take inventory of what we have and hope for the best. I can’t really do much unless I get a bail out also.
Chris’s last blog post..Lovable Losers
apricot tea. responds:
Posted: October 6th, 2008 at 9:25 am →
I’m choosing to ignore everything as well, but for different reasons: I don’t understand a damn thing about what’s going on! I’m just hoping for the best. I’ve heard it said that we’ll all be fine in the end, it’s just going to take some time to undo the damage that has been done. I’ve also heard that the media is blowing this up a bit too much, which is in turn scaring people & making them paranoid. This could be untrue, but I’m choosing to believe it regardless. I think life is too short to worry about such things… especially if they don’t really involve me. I don’t own any stock… so I’m assuming I’m alright. (???) :]
Nurit responds:
Posted: October 6th, 2008 at 9:32 am →
Before I can say how I deal with the current situation, I have to say how I deal with money in general. I ignore it. This post is another wake up call for me.
I used to be so independent about everything before I got married. Now it is comfortable to let the hubby take care of the money. Very bad thing on my part! I always tell myself I have to be more involved, but I never do.
And between a job, blog, kids, house chores, task and more task every day, I hardly even find the time to read the news. Shame on me. Well, I do know there is a recession but didn’t have time to think about it, even if I was going to not ignore it.
Heavy sigh……….
I believe in long term as well. However, people ARE talking about withdrawing some cash from the bank account and keeping it under the mattress, or in the freezer ?, garage?
We are thinking of maybe opening new bank accounts in other banks and dividing the eggs between different nests, taking some money out the savings and paying to lower the mortgage since this one has the most % at the moment.
Oh, my… you got me thinking now.
Nurit’s last blog post..Try something new: Acorn squash
Hunter Nuttall responds:
Posted: October 6th, 2008 at 9:44 am →
I check my investments every 3 months, when my statement comes. Does that make me a freak?
I figure if I’m not actually going to change anything, and it’s just a matter of curiosity, then I don’t need to check that often. Thanks for the link; it looks like you have quite a few good links there.
One thing though, concerning this:
“the good news is that LONG TERM, the stock market returns an average of 10% annually”
I think it’s important to say that 10% is what has happened in the past, but it’s not guaranteed to happen in the future. I still keep that 10% figure in my head, but I’m more confident about foreign stocks getting that return than U.S. stocks.
Hunter Nuttall’s last blog post..I Am Problogger, Hear Me Roar
Mike Goad responds:
Posted: October 6th, 2008 at 9:49 am →
I’m diversified and invested in things that this financial mess doesn’t seem to have too bad an effect on. Before I retired, my investments were very, very risky…. I lucked out and made enough to be able to retire at 55. My investments are relatively conservative, but, at this point, are significantly outperforming the markets.
MomGrind responds:
Posted: October 6th, 2008 at 10:08 am →
@ Barbara: I agree that it’s important not to panic.
@ Scott: I completely agree that frugality is very important right now. I’ve been trying to be more mindful of my spending too.
@ Dave: It’s great that you’re learning from your past mistakes. As for the markets, unfortunately emotions such as panic and greed play a large part in how they behave.
@ Avital: This IS the best way to look at it, especially since you’re young.
@ Lance: Logically, this IS a good time to buy. But emotionally…
@ UrbanVox: Investing in tangible assets is not a bad strategy.
@ Miranda: “Sometimes all the doom and gloom is a bit much, and it is important to remember the first rule of recession finances: Don’t panic.” AMEN.
@ Writer Dad: It’s true – everything is cyclical. Failing to understand that can result in making very bad decisions.
@ Urban Panther: “if I can’t afford it, I don’t buy it.” This is a very, very smart strategy. I hope the current crises will make it the norm.
@ Evelyn: Excessive worrying leads to panic and to bad decision making, so it’s important to avoid it.
@ MizFit: This is exactly what I’m trying to do: avoid obsessing.
@ Bamboo Forest: “getting stressed over the recession, not only makes us less happy, but less productive too.” – I couldn’t agree more!
@ Mark: Keeping a positive outlook is not easy these days, but I’m trying.
@ Jill: “I will move it to “safer” vehicles once I’m closer to retirement.” – this is my plan too.
@ Don Mills Diva: This IS tough on retirees. For anyone younger than 50, it should be fine. Those $1000 will buy you stocks at bargain prices – that’s great.
@ Max: “What worries me most about a huge depression is possible job loss.” – That’s what I meant when I said that everyone could be affected – even those who are not investors.
@ Suzie: I’m not surprised. It’s very easy to get discouraged.
@ Chris: Sounds like a good strategy.
@ apricot tea: Well, if we enter a long drawn depression, there will be outcomes even for non-investors. But I agree that the media likes to emphasize the bad.
@ Nurit: It’s really important that you have access and control over your finances. I used to be a divorce attorney. Sure, you and your husband will live happily ever after, but if you don’t, it’s a very bad idea to let him have all the access/ control.
It’s a good idea to have some cash – a few days’ worth of food – in case something happens to your bank and you don’t have access to the money fir a while (even if it’s FDIC insured).
It’s also a good idea to spread the money between several banks, as long as they all offer FDIC insurance. Your funds are usually FDIC insured up to 100K in each bank.
@ Hunter: “I think it’s important to say that 10% is what has happened in the past, but it’s not guaranteed to happen in the future.” This is very true. Past performance does not guarantee future results. Still, these are the only numbers we have so it’s natural to cite them.
@ Mike: Sounds like you’ve made some excellent choices.
Dot responds:
Posted: October 6th, 2008 at 10:14 am →
I don’t handle the market at all. I’ve never understood it and I hate the fact that we have to gamble with our savings (or authorize someone else to do so). My only investments are a small IRA and a small 401(k), since when I was younger I was so poor I had to cash out and use the money to live on. Now I’m not sure I can safely retire until forced to. I was told that most mutual funds diversify into the same areas, so there’s no use having more than one mutual fund, so I don’t. I’m not really interested in studying investing, so I have to rely on investment firms who don’t really have my interest at heart.
The “reassurance” that all the investment houses are putting out right now, that over time the interest rates have averaged out to 10%, is really misleading. The problem is, the interest rate recovers, but not necessarily the principal. If the dollar value of the stock goes down, you lose big money. If the interest rate goes down, you lose small money. If your principal’s decimated, it doesn’t really matter what the interest rate is. My IRA has steadily gone down for several years now. I’m eligible for early retirement in less than six months. Were I to retire now, my income would be pitiful. And that goes for any year in the future. Everything else goes up, but will my investment income go up? No one knows.
Dot’s last blog post..Haiku Friday
hyrcan responds:
Posted: October 6th, 2008 at 10:26 am →
Maybe it’s just my history of not ever having any money in the first place. But “financial crises” don’t interest me. I’m not really interested in money to begin with, it has never brought me joy, or happiness. When I’m farther on in years, I’ll likely still be working, I doubt I would do well “retired” even if I had loads of money. So I’ll save, I’ll invest in good long term investments… but I’m not going to sweat stuff going down like recent news.
And I know if the proverbial poo hits the fan… and this is the end of capitalist society. Well… I’d welcome the change to be honest. It’s not like there aren’t people in this world living on much less that I do(and most ‘westerners’ do), and while they may not turn down improvements they are still able to find joy and happiness to enjoy in the world.
hyrcan’s last blog post..Where am I?
Davina responds:
Posted: October 6th, 2008 at 10:30 am →
Hi Vered. I listen to what is going on, but I don’t take action. My mutual funds are in for the long term and I don’t have any stocks that are worth much at this time anyway. To sell would cost me money so I’m just sitting tight.
Davina’s last blog post..Creative Luny Landing In The Sand
Christina responds:
Posted: October 6th, 2008 at 11:07 am →
I’m handling this the only way a poor college student can, ignoring the markets. I haven’t had a retirement account since I was in the military, and even then didn’t understand how it worked. Even before this all occurred, my idea has been that I need to put money aside for the day I have to retire. I’m eventually going to become a teacher and they have special retirement plans for them, but I’m not sure how they work and feel safer having a back up plan. I know that most likely when I retire, there will be no social security left to give the last half of Generation X and this does/does not bother me. I plan to save, save, save as my parents taught me and were taught by their parents who lived through the Great Depression. I don’t like gambling and to me that is what the stock market is for the unwise consumer. As you said, you need to thoroughly research the stocks and funds you invest in because it should be for long term gain. My way of dealing with economic stress is to penny pinch and live how we did in the early 80s, on the bare necessities.
Kim Woodbridge responds:
Posted: October 6th, 2008 at 11:16 am →
I’m with @hyrcan. I own next to nothing so having less of nothing doesn’t really affect me very much
Although I do often wonder if this is the end of the American Empire and capitalism as we know it. Historically no great world power has stayed in power indefinitely and I wonder if power will now swing in a different direction to another part of the world. This doesn’t worry me though – it’s just something I think about.
Occasionally I get nervous about finances and the market and changes but I really try not to worry about things that I can’t control.
Kim Woodbridge’s last blog post..(Anti) Social-Lists 10/5/08
MomGrind responds:
Posted: October 6th, 2008 at 11:41 am →
@ Dot: “I was told that most mutual funds diversify into the same areas, so there’s no use having more than one mutual fund, so I don’t.” Depending on how much you invest, putting everything in a low-cost S&P 500 fund is not a bad idea.
@ hyrcan: Interesting outlook. Very different than mine, but interesting just the same.
@ Davina: Sounds like a very reasonable approach.
@ Christina: It makes a lot of sense to save and place your savings in safe vehicles. I don’t see investing in the stock market as gambling – I see it as an opportunity to benefit from the growth of the economy. But in bad years, safer vehicles don’t sound too bad.
@ Kim: “I really try not to worry about things that I can’t control.” A BIG amen to that.
Wendi Kelly-Life's Little Inspirations responds:
Posted: October 6th, 2008 at 11:54 am →
Vered,
I agree with you. I don’t look at our long term investments. I also don’t concern myself with the decline of our Real Estate investments either. As long as we aren’t in a position of needing to sell, we can wait this out. All tides turn.
Ellen Wilson responds:
Posted: October 6th, 2008 at 12:10 pm →
Vered,
You are way more financially savvy than I am. My husband has a portfolio from work and once in awhile he monkies around with it. That’s his area. I do the rest of the finances.
I try not to worry about it. I think that maybe I’m becoming immune to anything in the media because most of it seems like scare tactics. But I suppose, when you think about it, it really isn’t in the markets best interest to scare us. It creates buyer trepidation.
I still remember after 9/11 Bush telling us not to worry about anything and spend spend spend.
We have seriously tightened our belts though. I’m very good at looking for deals.
Marelisa responds:
Posted: October 6th, 2008 at 12:25 pm →
Hi Vered: I think it’s important to watch the news and keep informed, as well as take measures to tighten our belts a bit, but I also think it’s important not to panic. On Saturday there was an economist on CNN saying that if farmers couldn’t get credit to buy crops, there could be mass starvation. Now, I think it’s important to point out that farmers should get special attention, but to come out in CNN saying that there could be mass starvation is just irresponsible. I like the cool headed approach you’re taking toward your investments.
Maya responds:
Posted: October 6th, 2008 at 1:12 pm →
Vered,
Good article. I know my husband and I would love to cash in through some investments in the stock market if we really had the time. As for our investments, we are just sitting on them now as it is a bad time to get any money out at this point. We are going to try and buy a bank owned home and hopefully get a good deal – we just sold our home in Ohio when we moved to WA.
I am learning so much about you through these blogs, you are so incredibly smart and have some great life experience – the military, divorce attorney… I am truly impressed!
Maya’s last blog post..The key to happiness and balance is right with you, just learn to use it – Part 1 of the thinkmaya framework
nATURAL responds:
Posted: October 6th, 2008 at 1:19 pm →
I will say I’m discouraged, but NOT surprised, by the recent financial events, even other countries are now jumping on this “bail out” bandwagon. We are reaping what we have sown, why act surprised? Out of fear and chatter, I thought about stopping my investements, BUT when I checked my portfolio, it wasn’t bad at all. So I plan to ride it out because I have time.
I guess if you’re close to retirement and want something a little more “secure” the stock market is not the place to be. I also invest in mutual funds and ETFs. What’s scary about what’s happening now is that the Great Depression of 1929 started in the United States and here we are yet again. I’m waiting on the ball (or the other shoe) to drop, one of them is going to fall. I don’t think this collapse is over.
How do I deal with the current financial uncertainty? I make sure I do NOT add debt to my life. I try to make wise decisions with the money I have now. I make sure my money is invested in something I understand and not where I’m told to put it. If I’m comfortable with where it is, I kind of know what to expect (the ups and downs) so it makes it a little easier to hang in there.
Cath Lawson responds:
Posted: October 6th, 2008 at 1:23 pm →
Hi Vered – funnily enough – a few years ago, I’d have been with you – re ignoring the market completely in a bear market. But nowadays – I would still keep an eye on what was going on in the companies I was invested in.
I didn’t in the last bear market – and one company – even though it was in the FTSE100 went bust. It was my own fault. I was busy ignoring everything – including the news. My mother tried to tell me the company were doing badly – but I was like, “what the hell would she know”. So I ignored her.
D responds:
Posted: October 6th, 2008 at 2:01 pm →
John McCain said the economy is fundamentally sound… I don’t know what you all are talking about.
Dr. J responds:
Posted: October 6th, 2008 at 2:32 pm →
Well, in 1987, I sold my holdings and got clobbered! In 2001 I held and didn’t sell and got clobbered! So since then I’ve slowly withdrawn the money and have been in the sidelines for a while now just watching the rest of y’all get clobbered. Trust me, I know the feeling
Friar responds:
Posted: October 6th, 2008 at 3:43 pm →
It’s funny how it works.
The country has the same number of people, the same amount of timber, coal, oil, and mines. The same widgets and gadgets in our homes. The same amount of able-bodied workers. The same amount of bricks-and-mortar buildings.
Nothing’s changed.
Nothing…except the overall “perception” of how much all this is “worth”.
Friar’s last blog post..The Happy-Mealer
hank responds:
Posted: October 6th, 2008 at 3:52 pm →
As long as people don’t freak out about the situation and pull their money out and stuff it under their mattress, we oughta be ok. The people that will be the most hurt by it are those exact people. Your money may be worth less, but on the bright side, if you’re still putting it in, and planning for the long term, you’re buying stocks/bonds/funds at historical lows now.
hank’s last blog post..Hanks Weekly Hangouts #52 (October 5, 2008)
MomGrind responds:
Posted: October 6th, 2008 at 3:59 pm →
@ Wendi: “As long as we aren’t in a position of needing to sell, we can wait this out. All tides turn.” This is exactly what I’m trying to tell myself…
@ Ellen: “We have seriously tightened our belts though. I’m very good at looking for deals.” I think this is a very good strategy, regardless of what happens.
@ Marelisa: I agree. That was irresponsible. I believe the media and its panic-inducing reports is at least partly responsible for what’s going on in the markets right now.
@ Maya: Thank you. I’m flattered.
Indeed, this is not a good time to sell stocks. Many think it’s a good time to buy more, but I’m not THAT brave.
@ Natural: I like your approach, especially being careful with the money you do have and not blindly investing.
@ Cath: This is good advice. We don’t have much in individual companies, but I agree that it makes sense to follow the news.
@ D:
@ Dr. J: Haha glad you’re safe.
But if we’re heading into a decade-long depression, no one is safe, really.
@ Friar: You are too smart for your own good.
No doubt, a lot of it has to do with emotions. Some experts ARE saying that this is just a glitch and that the economy IS fundamentally strong, but that wouldn’t make for good headlines now, would it?
@ hank: I agree that anyone who panics and sells now will likely lose the most.
Carla responds:
Posted: October 6th, 2008 at 4:22 pm →
Having lived a life of non-career type administrative jobs and living in the Bay Area (where I was born and raised and don’t know any better!) has not left me much to invest. I see myself working until the end of my life.
My self-employed partner on the other hand has invested and has lost in this market. He is not one to ignore this. He is up before dawn checking the markets online.
Personally, I ignore it but it is hard to when everyone is affected by this. Even if you don’t invest, use credit, etc, this will impact everyone.
Carla’s last blog post..Schwarzenegger Vetoes Bill to Ban Cancer-Causing Teflon Chemicals in Food Packaging
Kelly@SHE-POWER responds:
Posted: October 6th, 2008 at 4:24 pm →
I don’t have shares that I can do anything with right now. I Australia retirement funds are invested in a superannuation fund who makes these investment decisions. You just choose low risk, high risk, medium risk. I have lost a bit of money through that in past year, but because I can’t touch it anyway I don’t seem to care. What’s the point? I do have a big mortgage though, and even though I think we’ll mostly be fine down under, I am being a bit more careful about spending, particularly if it involves debt. We were going to do a big overseas trip next year but have decided that’s probably not the best use of our money right now. We need to shore up our finances a bit so I think we’ll pay down some debt and stay close to home for 2009. So, yes I mostly ignore it, but I am being a bit more security conscious than usual.
Kelly
Kelly@SHE-POWER’s last blog post..Quote of the Week: Love Across The Miles
Robin responds:
Posted: October 6th, 2008 at 7:30 pm →
Hi Vered
In the past I’ve found that recessions and silly government decisions have actually benefited me, in strange ways (as much as I might disagree with the silly government decisions). I don’t worry about them at all.
Robin’s last blog post..Why We Want To Live
Rita responds:
Posted: October 6th, 2008 at 7:35 pm →
Vered,
You probably don’t write about it for the same reason I have no comment about it!
Rita
CK Lunchbox responds:
Posted: October 6th, 2008 at 9:52 pm →
Well, to be honest, I drink allot using the money collected from drivers at the street corner I regularly beg. I tell them it’s for food, but, well…
Actually, it helps to stay upbeat, find humor in the situation, and keep and eye on things while keeping a cool head.
In all seriousness, a very good and practical post. Thanks
CK Lunchbox’s last blog post..Tagged Doggonit!
Shamelle-EnhanceLife responds:
Posted: October 7th, 2008 at 2:17 am →
I can’t agree more!
I think most people are just “sitting & waiting” and hoping…… for a turnaround.
Shamelle-EnhanceLife’s last blog post..13 Ideas To Make Boring Jobs Bearable And A Little More Interesting
think responds:
Posted: October 7th, 2008 at 6:42 am →
Vered,
Very crucial post. Reader’s responses to the comments in this post, itself will be a nice crisp post. The readers brought forward many useful tips.
Also, I followed your tip and started reading more blogs and giving feedback. Thank you.
-think
think’s last blog post..Mis en Place : Guide to Doing Things in Daily Life
Stacey / Create a Balance responds:
Posted: October 7th, 2008 at 6:48 am →
Vered, The global recession/depression (and what’s to come) really scares me. I am beginning to wonder if bread is going to skyrocket to $20/loaf. From a retirement perspective, I am investing long term. My fear tells me to put everything into cash and wait it out. But all my advisors tell me to keep investing and ride out the storm. I try to tell myself that I am “buying low” and it will pay off in years to come. I’m making educated guesses, trying not to get too caught up in the fear, cutting costs, diversifying my investments, and hoping for the best.
Stacey / Create a Balance’s last blog post..Spa. Dinner. Drinks. Quiet.
Sara at On Simplicity responds:
Posted: October 7th, 2008 at 7:52 am →
Yep. Not much has changed for us and we continue to invest on a regular schedule. We check our holdings less (who wants to see that?), but we do keep tabs on market movements. Since we were already living well within our means, we haven’t had to change much to deal with the downturn.
Andre Kibbe responds:
Posted: October 7th, 2008 at 8:11 am →
Being a freelance writer, if things get worse, I’ll start looking for work in foreign English-speaking markets and get paid in Euros
Andre Kibbe’s last blog post..Time Management vs. Task Management
Emily@remodelingthislife responds:
Posted: October 7th, 2008 at 8:27 am →
I am embarrassed that I read this the other day and got distracted and still haven’t thanked you for the link. Thank you! Great post and conversation here!
MomGrind responds:
Posted: October 7th, 2008 at 1:15 pm →
@ Carla: I agree. This will impact everyone.
@ Kelly: Your approach to spending and debt makes a lot of sense.
@ Robin: That’s an encouraging thought.
@ Rita: I respect that.
@ CK Lunchbox: A sense of humor always helps.
@ Shamelle: The turnaround might be years away, though.
@ think: I always enjoy the comments to my posts. They are often better than the post itself.
Glad you’re taking my advice – I hope it will work for you.
@ Stacey: Sounds like you’re doing a good job. Continuing to invest is tough, but this IS supposed to be a good time to buy.
@ Sara: The fact that you were already living within your means is wonderful. And so rare these days.
@ Andre: Haha sounds like a great plan.
@ Emily: You’re welcome.
Leanne Magraith | Forever Change responds:
Posted: October 7th, 2008 at 3:31 pm →
I would like to be in a position where I had money to “worry about”. Instead of an investment portfolio, my partner and I have a portfolio of debts – mortgage, car loan, business loan, money we owe my parents etc. As we live from pay day to pay day we are not really affected much by the current economic situation.
The only thing affected is our superannuation funds, which have both performed poorly and have lost value, but like Kelly said because you can’t touch it anyway I don’t really care much about that. I know in time the superannuation will bounce back.
Leanne Magraith | Forever Change’s last blog post..A Story About a Major Business Restructure
Avani responds:
Posted: October 7th, 2008 at 9:36 pm →
Moved out of stock market last oct/nov. Plan to get in after a few years. Currently we are simply paying off as many debts as possible since interest rate is rocketing like anything.
Avani’s last blog post..Saying No – And Feeling Good About It
MomGrind responds:
Posted: October 7th, 2008 at 9:50 pm →
@ Leanne: Having a lot fo debt is stressful. I hope you can pay it all off as soon as possible.
@ Avani: “Moved out of stock market last oct/nov” – that was a pretty smart move!
Avani responds:
Posted: October 7th, 2008 at 10:50 pm →
Vered, I have been thanking my stars over and over for that. Had we been even month late, we would have lost a major portion of our gains and mutual funds would have been in negative.
Avani’s last blog post..Saying No – And Feeling Good About It
J.D. Meier responds:
Posted: October 8th, 2008 at 12:13 am →
It sounds like you hit the keys – diversified, long-term, and insured.
J.D. Meier’s last blog post..Help Your Colleagues Look Good
Zandria responds:
Posted: October 8th, 2008 at 1:29 pm →
This post’s subject is what I’m planning to write about on BlogHer this Sunday. It seems like my strategy is to ignore things, too. We don’t have any control over what happens, right?
Zandria’s last blog post..Would You Kiss Someone on the First Date?
Mike Goad responds:
Posted: October 8th, 2008 at 2:44 pm →
I called my financial adviser on another matter today and, once that was taken care of, I thought I would ask how I was doing with the market volatility of the last several days. It turns out better than I thought. My worst exposure is in annuities that do very well when the market is doing very well. When the market does very poorly, I still earn 5% in one annuity and 7% in another — until I start taking money out and then the rules are a little different. So basically, I have no exposure to the market and the primary impact on us will be in whatever happens to prices.
Mike Goad’s last blog post..I’m retired…, or am I?
MomGrind responds:
Posted: October 8th, 2008 at 3:51 pm →
@ Zandria: True. We only have control over our own behavior, which includes our spending habits and investment strategy.
@ Mike: No exposure to the market is a very good thing right now.
Jamie responds:
Posted: October 9th, 2008 at 2:03 pm →
I am so sick of hearing about the economy and the bail out, I wish I could ignore it, too. Unfortunately, my family loves to discuss politics and it’s all I hear lately. I can’t wait for the election to be over.
Jamie’s last blog post..Do You Write Pork Rinds or Meatloaf?
Evelyn Lim responds:
Posted: October 10th, 2008 at 9:13 pm →
Wow…it seems I’m late to the party! I was a little confused when you had your comments closed in your last post. For a while, I thought you are no longer taking comments.
Okay…what’s going right in my life?
1. My family.
2. My work.
3. Everything!
Nothing is really broken! I am whole, loving and in perfect health!
Evelyn Lim’s last blog post..Heroes Of Healing: Neale Donald Walsch
MomGrind responds:
Posted: October 12th, 2008 at 5:20 pm →
@ Jamie: “I can’t wait for the election to be over.” I think many of us can relate.
@ Evelyn: I love that you sound so upbeat.
Re closing comments, no I’m not closing them to all posts – I’ll explain more on Friday. 
Keep Up With Me responds:
Posted: October 13th, 2008 at 3:02 am →
The Economic Crisis Hasn’t Affected Me. Should I Be Worried?…
(This is cross-posted at BlogHer.)
Bad things happen all the time, here in the U.S. and around the world. It seems like every day there’s a headline about a mudslide consuming a remote village, or a bus overturning, or a bomb exploding, or a plane…
Gunfighter responds:
Posted: October 13th, 2008 at 7:19 am →
I ignore it. The way we live means that we have to pay some attention to it when costs rise, but we are fortunate in our work, and not in a terribly exposed position, as relates to teh current meltdown.
Having said that, we know that unless there is a huge turnaround, we won’t be retiring in the thirteen years we WERE looking at, but, that’s life.
Gunfighter’s last blog post..Some Questions For The McCains & Gov. Palin
MomGrind responds:
Posted: October 13th, 2008 at 11:57 am →
@ Gunfighter: Many people are delaying their retirement now. Like you say, nothing much to do about it.
18 Means of Living Below Your Means | Marc and Angel Hack Life responds:
Posted: October 20th, 2008 at 4:24 am →
[...] Adhere to a long-term investment strategy. – “I’m a long-term investor. The stock portion of my portfolio is spread over several mutual funds, a few ETFs and a few individual stocks. Each and every one of these holdings was carefully chosen, after thorough research. I believe in these stocks and funds. I consider them as my best bet in growing my money – LONG TERM.” – via MomGrind [...]
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Posted: October 23rd, 2008 at 7:23 pm →
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Posted: October 24th, 2008 at 12:34 pm →
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30 Simple Family Pleasures | Zen Habits responds:
Posted: February 5th, 2009 at 3:00 am →
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Mark Ress responds:
Posted: February 27th, 2009 at 6:56 am →
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30 Semplici Piaceri In Famiglia | LeVieDellaRicchezza responds:
Posted: April 7th, 2009 at 10:32 pm →
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30 Simple Family Pleasures | Riysa responds:
Posted: April 21st, 2009 at 12:24 pm →
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30 family pleasures | Become a Better Father responds:
Posted: July 16th, 2009 at 10:21 am →
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Sonja Sanita responds:
Posted: October 2nd, 2009 at 7:26 pm →
Your post is interesting and I would totally agree with you if this were 3 or 4 years ago. The stock market is a totally different environment today than it has been historically. Money has always gone into the stock market but today we have a system in place that has money also consistently coming out of the stock market. Baby boomers are now being forced through their 401k to having money taken out of the market. This is like a leaky faucet that is only going to start leaking more and more the more as the years pass and more baby boomer start to collect on their 401k.